The Legislature's Revenue Committee disposed of two tax reform bills Wednesday afternoon, ideas brought forward by Gov. Dave Heineman.
Omaha Sen. Beau McCoy made the motion to kill both bills (LB405 and LB406).
"405 and 406 ... exited stage right, and in comes a more in-depth and intense study which I'll be prioritizing to show that I mean what I said all along, that this is very important," McCoy said.
McCoy's priority bill (LB613), which would create the Tax Modernization Commission, is now expected to lay the groundwork for tax reform discussions that will go on for the rest of the year. It was introduced by Revenue Committee member Paul Schumacher of Columbus.
With an amendment to the bill, crafted Wednesday by the committee, the makeup of the 12-member commission would be the eight Revenue members and chairs of the Education, Health and Human Services, Appropriations, Agriculture and the Legislature's Planning committees. Education Committee Chairwoman Kate Sullivan is already on the Revenue Committee.
The commission also would have ex-officio, nonvoting members such as employees from the Department of Revenue and the Legislative Fiscal Office and could call in experts and help from legislative staffs.
Revenue Chairman Galen Hadley said the commission would get started as soon as the bill (LB613) passes.
The discussions of tax reform so far have been centered with the bills introduced on behalf of the governor by McCoy and co-sponsored by Omaha Sen. Brad Ashford.
Omaha senators and Chamber of Commerce have seemed the most high profile in the issue and all the activity surrounding it.
The governor's boldest proposal would have eliminated income taxes and $2.4 billion in sales tax exemptions to make up for the loss of income taxes. Ashford also has put forward a couple of reform ideas.
Three members of the Revenue Committee are from Omaha: McCoy and Sens. Burke Harr and Pete Pirsch. No Lincoln senators are on the committee.
How engaged have Lincoln senators, the Lincoln Chamber and Lincoln businesses been in the issue of major tax reform?
If the commission is created as the Revenue Committee envisions, Lincoln Sen. Kathy Campbell would be a member as the Health and Human Services chairwoman.
Lincoln Sen. Danielle Conrad has introduced several tax related bills this session, including the so-called state level "Buffett rule," which would increase income tax rates for high-income earners.
Conrad said Lincoln senators will be "very focused" on discussions regarding the revenue infrastructure because of its impacts on the city and on the state's ability to meet critical obligations.
Wendy Birdsall, Lincoln Chamber of Commerce president, said Lincoln has partnered with the Nebraska and Omaha chambers on the issue.
"We've been for tax reform ... all along," Birdsall said.
But, she said, the devil's in the details.
It would be beneficial to have someone from Lincoln on the Revenue Committee, she said, but at the same time, senators are to be working for the benefit of the state, not for their own parochial interests.
Tax reform, and simplifying the state's tax code, has been aimed at job creation and population growth. A lot of Lincoln's job growth has been from existing businesses or entrepreneurs in the city, she said.
While jobs mainly are coming from within, she said, the city needs to always be sharpening its edge and making itself as attractive as possible to create businesses and jobs.
Lifestyle, activities and schools make a big difference, and the city is doing a better job of promoting itself to a younger generation in digital media.
The Lincoln Chamber would support several tax reform ideas, she said:
* Expand the carry-forward period for net operating losses. It's at five years in Nebraska. The federal government is at 20 years. Ten years would be a great compromise, Birdsall said.
* Reduce the corporate income tax to one bracket that matches the individual rate so it creates a level playing field.
* Reduce the individual income tax rate.
* Eliminate the alternative minimum income tax, which is imposed at a nearly flat rate on an adjusted amount of taxable income above a certain threshold.
"I think there's some things we can do, and I think we can get them done this session," she said. "We need to make sure Nebraska's as competitive as it can be."